Cryptocurrency hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy to protect its US assets in the country from creditors, as previously reported bloomberg and CNBC. Representatives of the Singapore-based company filed a filing in the Southern District of New York court on Friday that legally protects American assets of bankrupt foreign debtors from creditors in the US.
Founded in 2012 by Kyle Davis and Su Zhu, 3AC managed nearly $10 billion in assets as recently as March, with the latter sinking to $3 billion in April. Like many other crypto firms, including lending giants Celcius and Babel Finance, 3AC’s turn in fortunes is part of the so-called crypto “winter”, which brought down stablecoins and sent the value of bitcoin down.
Earlier this week, reports surfaced that 3AC failed to pay a $670 million loan provided by crypto broker Voyager Digital, resulting in the suspension of all trades, deposits and withdrawals. sky News It was later reported that a court in the British Virgin Islands has ordered the liquidation of 3AC and that the firm is reportedly working with business consulting firm Teneo to oversee the process.
In May, Davis and Zhu admitted in an interview with WSJ The company lost a $200 million investment after Luna and its sister coin, TeraUSD, crashed. At the time, both remained optimistic about crypto’s prospects, they pointed out. WSJ That they “have always been crypto believers” and “still are.”